Puma Calculates Monetary Value of Its Ecological Impact, a Business First

Sportswear manufacturer Puma costs the environment €94.4 million ($132 million) each year to bring its products to market, according to preliminary data from its first environmental profit-and-loss statement. Part of parent company PPR Group’s long-term sustainability plan, the evolving Environmental Profit & Loss Account puts a monetary value to the ecological impact of Puma’s business and supply-chain operations, from water consumption to greenhouse-gas emissions.

Jochen Zeitz, Puma’s CEO and chief sustainability officer at PPR

DOLLARS AND SENSE

By far the most resource-hungry stage in Puma’s supply chain is raw-material production. Creating cotton leather, and natural rubber alone accounts for 36 percent of the company’s total greenhouse-gas emissions (€16.7 million) and 52 percent of water consumed (€24.7 million), according to the report. “[This indicates] that the most water intensive activity in the production of a T-shirt occurs at the initial step: the cultivation of cotton,” the press release notes.

The most water intensive activity in the production of a T-shirt occurs at the initial step: the cultivation of cotton.

Puma is the first global business to put an economic value to its environmental impact, notes Jochen Zeitz, Puma’s CEO and chief sustainability officer at PPR. “Gaining a better understanding of the source of the natural goods and services Puma relies on, and the declining availability of the basic resources required for our business growth, will help PUMA build a more resilient and sustainable business model and ultimately better manage its impacts on the environment,” he says.

By uncovering the specific areas that truly “need improvement,” Zeitz adds, Puma is able to mitigate the footprint of its supply chain without affecting profits. The Environmental Profit & Loss Account not only prepares the company for potential future legislation (such as disclosure requirements), but it could also inspire other businesses to engage in environmental reporting and transparency.

Puma wants its Environmental Profit & Loss Account to inspire other business to engage in transparency.

“It’s a game-changing development for businesses to integrate environmental issues into their current business model like this, because it provides a basis for embedding their reliance on ecosystem services into business strategy,” says Alan McGill, a partner at PricewaterhouseCoopers, which helped develop the methodology used in the report. Puma plans to share its findings with the rest of the industry as it rolls out the rest of its analyses—including acid rain and smog precursors, volatile organic compounds, waste, and land use—this fall.